PROBLEM SOLVING ON BUSINESS TRANSACTIONS

1 Amount of tax liability Tax liability

Regular transactions subject to and exclusive of
VAT 168,000.00 1400000x0.12
(1344000/1.12)x0.1
Purchases inclusive of VAT (on regular sale) 144,000.00 2
Purchases inclusive of VAT (on zero-rated sales) 80,640.00 672000x0.12
Total amount of tax liability 392,640.00

2 VAT for Stormy Company is zero since it is a foreign denominated sale like an export
sale when the TV and refrigerator is sold to an OFW, a nonresident.

3 The VAT is P72,0000 from the sale of 1-unit of 4-door sedan car (P600,00x12%). The 1
unit of 15-seater van is not VATable since it is a foreign currency denominated sale.

4 Data Tax liability

Since it is VAT-exempt
Export Sale 0.00 transaction
Local Sales 60,000.00 It is taxable P60,000x12%
Purchases related to sales, inclusive of VAT
Cannot claim since it is VAT-
On export sale 0.00 exempt
On local sale 42,000.00 (392,000/1.12)x0.12
Total Tax Liability 102,000.00

5
Sale to private entities subject to 12%
VAT 1,000,000.00
Sale to government 500,000.00
Purchases during the quarter applied to
all sales 300,000.00
Purchases from VAT-registered persons applicable
to sale to government/quarter 200,000.00
Purchase during the quarter applied to sales to
private entities 400,000.00

a. Standard input VAT 120,000.00 1000000x12%

b. Actual Input tax on sale on government 25,000.00 500000x5%
 c. Input tax chargeable to cost or expense 35,000.00 300,000x12%+200,000/1112%x12%
d. VAT payable for the quarter 48,000.00 400000x12%

6
1. Input tax attributable to sales subject to
12% 25,000.00 5000+20000
2. Input tax attributable to zero-rated sales 3,000.00
3. Input tax attributable to VAT-exempt sales 2,000.00
4. Input tax attributable to government sales 4,000.00